Tax change to cost construction workers more than £3,000

Grant Prior 2 years ago
Share

The Government is being accused of a “gross underestimation” of the cost of tax changes on construction workers employed via umbrella companies.

hmrc
HMRC is accused of underestimating the impact of these tax changes

A recent HMRC policy document costed out the plan to ban workers employed via umbrella companies from receiving tax relief on their expenses.

The document states that the change “is not expected to have any significant economic impact.” with workers £360 a year worse off.

But construction union UCATT said “this is a gross underestimation of the financial impact on British workers.”

Union experts estimate an average construction worker working for an umbrella company will have £144 of weekly travel expenses.

Under the new law, these expenses will then be taxed at 45% (20%income tax, plus both employees and employers NIC).

This will mean a loss of £64.80 per or £3,369 per year.

The document estimates that 430,000 workers employed by umbrella companies or engaged by “employment intermediaries” will pay more tax.

Brian Rye, National Secretary of UCATT, said: “The attitude of HMRC in belittling the impact this tax change will have on construction workers, working under the yolk of umbrella companies, illustrates the utter contempt this Tory Government has for the British worker.

“In the real world, £3,369 less a year will mean a lot less food on the table.”

“Almost half a million workers will be significantly worse off after April, when this measure is introduced.

“For those that have to travel to several sites for their work the hit will be massive.”

UCATT is campaigning for the complete abolition of umbrella companies.

It believes that normally expenses should be paid on top of wages and not be used to form part of expenses.

Latest news

Alandale Rail bosses jailed for Thameslink corruption

Four men jailed and Alandale Rail fined £25,000 over fraud and bribes at Farringdon station project
14 hours ago

Demolition firms lead way with virtual smart cards

Skills cards can now be stored on smartphones
6 hours ago

Legal row hits stalled £200m Liverpool Chinatown

Council and developer in war of words over flagship scheme
14 hours ago

Skanska confirms £142m Tin Pan Alley contract

Skanska signs off contract for London Giles Circus mixed-use development
14 hours ago

Deal to start £65m Sussex shopping centre

Pre-sale and lease deals trigger Burgess Hill town centre revamp
14 hours ago

Jacobs in merger talks with CH2M

Merger would create global engineering giant to rival AECOM
15 hours ago

Race on for £240m Leicester construction framework

Four-year framework to deliver schools and city centre redevelopment plan
15 hours ago

Final week to vote for best companies in construction

Laing O'Rourke and Cemex are latest sponsors to support the Enquirer awards
15 hours ago

Plans in for £400m Kent housing scheme

Medway's 1,400-home Rochester Riverside plan submitted
3 days ago

Hotel contract row forces Primus into CVA

Contractor set up by former Multiplex boss Martin Tidd faces cash flow crisis
4 days ago

Manchester’s tallest building set for green light

Allied London's most ambitious scheme so far set for approval
4 days ago

Morgan Sindall hunts top talent at virtual jobs fair

Construction & Infrastructure division takes careers event online to boost diversity
4 days ago

Landmark VAT ruling on student rooms projects

Tax tribunal overturns HMRC’s VAT policy on student accommodation
4 days ago

Grenfell cladding fire test verdict due next week

Government slashes estimate of residential blocks at risk from 600 to 208
4 days ago

£100m East Riding prison gets green light

Category C jail to be built next to HMP Full Sutton, near York
4 days ago

GSK scraps £350m Cumbria pharma plan

Pharma giant will invest extra £140m existing facility expansion
4 days ago

Specialists land first trade packages at huge Berkeley site

Main construction starts on 88-acre Southall Waterside site
4 days ago

Electrification plans scrapped on three major rail routes

Contracts worth millions axed as Government switches focus to new train technology
4 days ago

Project delays dent Clugston results

Contractor confident about future prospects following a "challenging" year
4 days ago

UK drags Skanska Europe into £40m loss

Skanska chief aims to cut operational costs and tighten risk management
5 days ago

McLaren set to bag £45m Lakeside extension

Contractor beats off McAlpine, ISG and Sisk to take Essex retail deal
5 days ago

Demand grows for immediate revamp of building regs

Local council chief attacks BRE, contractors and manufacturers for not sharing previous fire test results
5 days ago

Canary Wharf Contractors pays £11,000 tax on £70m profit

Company offsets £13.9m Corporation Tax bill against losses at other group divisions
5 days ago

Mount Anvil plans 1,000 flats in London Royal Docks

Deal with London ExCel centre paves way to build block of apartments
5 days ago

Consultant RLB stages mass raid on Mace managers

Five senior figures jump ship to join rival
5 days ago

Ministers reject client levy option in Farmer Review

Government backs most calls for reform but stops short of 0.5% charge on clients
5 days ago

Construction and fit out boost profits at Morgan Sindall

Contractor bucks recent sector trend by telling City to expect higher than predicted profits
6 days ago

Lendlease ordered to pay £14.8m for city tower falling glass

Cladding contractor to pick up bill after 15-foot glass pane fell from 17th floor
6 days ago

Civil engineers act to avert Grenfell-style disasters

ICE launches review of lessons from tower tragedy to avoid infrastructure failures
6 days ago

Man killed in derelict church collapse

Tragedy at Cardiff site where old church was being demolished
6 days ago

Contractor services